2. Net pay
A. is more than gross pay.
B. is also known as take-home pay.
C. is gross pay minus 7.65 percent.
D. depends on how much the employee wants to pay in Social Security tax.

3. Any U.S. resident who does not file a tax return or who is not included on another taxpayer's return, is subject to possible criminal prosecution.
True     False

4. Tips received by service workers such as food servers or hairdressers are taxable. However, special bonuses such as free lawn care for a month earned by an "employee-of-the-month" or a trip to a resort earned by a star sales representative would not taxable.
True      False

5. The Earned Income Tax Credit is a special tax program designed to help:
A. Investors who have realized large gains during a tax year
B. Taxpayers with traditional savings accounts who have earned interest on their accounts
C. Low-income taxpayers who may qualify to get back more money than was withheld from their pay
D. Corporations that are emerging from bankruptcy

6. Which is more valuable:
A. A Tax Credit
B. A Tax Deduction

7. Rosalie is a student who earned $3,050 during the summer. Her employer withheld some of her income for taxes. Her parents claim her as a dependent on their tax return. Which of the following statements is correct?
A. Rosalie's parents should include her income on their tax return.
B. Rosalie should file a tax return and claim herself as an exemption to get a refund.
C. Rosalie should file a tax return to get a refund, but she should not claim any exemptions.
D. As a summer employee, Rosalie should have made an arrangement with her employer not to have any taxes withheld from her pay.

8. The "Standard Deduction" is the amount of money the IRS allows you to subtract from your gross income if you do not choose to itemize on your tax return. Which of the following statement(s) are true? (check all that apply)
A. The standard deduction determines the number of dependents.
B. The standard deduction depends on the filing status.
C. The standard deduction affects the amount of wage income.
D. The standard deduction is the same for all U.S. citizens and residents.
E. The standard deduction is not affected by the age of the taxpayer or spouse.
F. The standard deduction reduces the income that is subject to tax.

9. The "Relationship Test" is used to determine:
A. Whether an individual is required to file a tax return.
B. Whether two individuals can file a joint tax return.
C. Whether an individual can be claimed as a dependent on a tax return.
D. Whether relatives qualify for earned income tax credits.

10. Despite the best efforts of tax protesters, the government-mandated personal income tax system has never been declared unconstitutional.
True     False